Image via GIPHY If you were part of the millions of taxpayers who didn't get their refunds — and I am seeing on social media that even into 2021, some people are still waiting … — the National Taxpayer Advocate (NTA) feels your pain. NTA Erin M. Collins included that complaint in her list of the 10 most serious problems facing taxpayers. The list is part of the Internal Revenue Service watchdog office's Annual Report to Congress, which was released on Wednesday, Jan. 13. Tax fraud fighting delays: There's a common thread among the 1040s where refunds are delayed. These... Read more →
The Internal Revenue Service is already accepting e-filed business returns and says Free File for eligible individuals to do their taxes and electronically file at no cost will open in mid-January. If you use Free File, get ready. The Internal Revenue Service says it will open in mid-January. Yes, the IRS announcement is a bit of vague posting. It did not give a precise date of when the 2021 version of the no-cost online tax return preparation and e-filing web page will be available for eligible filers. A few filing facts: However, we do know a couple of things for... Read more →
I'm feeling a bit like the Internal Revenue Service's appointments secretary, but this Friday, Jan. 15, is a date when many taxpayers need to take action. Yes, I'm talking about the fourth estimated tax payment due at the end of this week, but also about some final tax year 2019 housekeeping. Specifically, individuals and businesses who were in the paths of some major disasters last year. The timing of those catastrophes prompted the IRS to give taxpayers who had already filed for an extension to finish their 2019 tax returns until Jan. 15, 2021, to complete them. These folks now... Read more →
Millions of taxpayers are facing a deadline at the end of this week. No, unfortunately I am not talking about the Jan. 15 mark that the Internal Revenue Service is required by law to meet in distributing the second round of COVID-19 economic relief payments. I'm talking about paying Uncle Sam instead of getting money from him. The final estimated tax payment for tax year 2020 is due on Friday, Jan. 15. Taking care of taxes yourself: Around 22 million individuals file these extra tax payments, which total four if you make them for the full tax year. They are... Read more →
UPDATE, Jan. 13, 2021: There was no big winner in the Jan. 12 Mega Millions drawing, although some lucky ticket holders matched enough numbers to have a nice pocketful of spending (and taxable) cash. This nationwide lottery jackpot is now $750 million. Picking lucky numbers from a lottery game dispenser. More than $1 billion is up for grabs in the two nationwide lotteries. The Powerball jackpot is at $550 million. A solo Mega Millions winner will walk away with $600 million. Since I know you've got your lotteries tickets in hand, here are six tax and financial tips in case... Read more →
Image: IRS "A Closer Look" In looking back at 2020, the Internal Revenue Service thinks it did a pretty good job, all things considered. That's the assessment from IRS Commissioner Chuck Rettig as his agency released its annual progress report, Internal Revenue Service Progress Update/Fiscal Year 2020 – Putting Taxpayers First. "The COVID-19 pandemic presented some of the greatest challenges to the IRS in its history, both in terms of being able to carry out our mission and in protecting the health and safety of taxpayers and our own workforce," wrote Rettig wrote in the report's opening message. "IRS employees... Read more →
When the Internal Revenue Service issued the first round of COVID-19 economic relief payments as debit cards last year, a lot of them ended up in trash cans. Many folks thought the mailing was just another slick marketing attempt to get them to apply for an added credit card. They tossed those envelopes and the valuable relief cards they contained in the trash. So that this next batch of approximately 8 million COVID relief debit cards now hitting (or at least heading to) mail boxes isn't mistaken for junk mail, the IRS has made changes to the envelope. Clear envelope... Read more →
Misdirected direct deposits of COVID-19 economic relief payments are getting a lot of attention. They should. But this is not a new problem. Lost electronic tax refunds happen every filing season. What is new is the mechanism the Treasury Department established at the end of 2020 to deal with errant Internal Revenue Service direct deposits. A new regulation, the final version of which was published in the Federal Register on Dec. 22, 2020, details how taxpayers report this problem and how the IRS should handle it and get filers their misdirected money. Previously, not the IRS's problem: More of us... Read more →
If you're among those anxiously awaiting your second COVID-19 economic relief payment (EIP), you have one more thing to worry about. Scammers are trying to get their hands on your money before you do. These criminals also are trying to get you to help them do just that. And the latest confusion about delivery of relief money to closed bank accounts could increase coronavirus relief scams. Bad bank account problems: Up to 14 million taxpayers who used tax preparation software to file their returns last year and opted to get advances of their expected refunds on pre-paid debit cards are... Read more →
Photo: Pixabay via Pexels The good news, at least from the reports I'm getting from my family, friends, folks in the tax community and social media, is that people are getting their second COVID-19 economic impact payments (EIPs). This latest round of payments officially is a tax credit known as the Recovery Rebate. It was part of the end-of-year federal funding bill, aka the Consolidated Appropriations Act, 2021 (CAA). The Internal Revenue Service started directly depositing the money, based on information it has in its system, on Dec. 29, two days after the legislation was signed into law. Now the... Read more →
Have you received your $600 COVID-19 economic impact payment (EIP)? If not, then you're probably doing the same thing as Purcival Fairweather. You're checking, double checking and rechecking yet again your bank account to see if the coronavirus cash is finally there. $600 check? More like check my account 600 times. — Purcival Fairweather 🍾 (@purcival) January 2, 2021 But your obsessive bank badgering won't have to go on very much longer. If your EIP doesn't arrive by Jan. 15 or shortly thereafter it's sent out as a debit card or paper U.S. Treasury check, then you're not getting it.... Read more →
Remember when you were a kid and you told mom about the latest misdeed committed by your little brother. Oh, wait. Maybe that's just me reminiscing. And as I recall, while my mother was glad to know when my younger sibling did or was about to do something (I was a proactive big sister!) that was dangerous (he was the more adventurous one), she emphasized that continually tattling about everything Ben did that annoyed me was not productive. And I never got rewarded for my snitching observations. My mother would not have made a very good Internal Revenue Service Whistleblower... Read more →
A new year is time for reassessment and resetting of priorities. That's true in the tax world, too. But to know what needs to be fixed or at least rejiggered, you also have to look back at what went wrong. Again, that applies in to taxes. Not surprisingly, the horrid 2020 offers us plenty, in our personal and professional lives, to re-evaluate. One more time, also a tax world truth. That's why today's Saturday Shout Out — the first of 2021 in this continuing feature; you can read 2020's if you want to reminisce — goes to Howard Gleckman's 2020... Read more →
Photo by Olya Kobruseva via Pexels Happy New Year! Oh, sorry. Was I typing too loud? I'm glad you were able to festively, and I hope safely, ring in 2021. Now that it's here, it also brings a new tax filing season. The Internal Revenue Service's delivery of the second round of COVID-19 relief money shouldn't hamper its handling of 2020 returns, which should officially start later this month. So if the IRS can be ready, so can we. So here are a few tax things to think about and take care of, after, of course, you're fully recovered from... Read more →
Even though we definitely are more than ready for 2020 to end, the celebration of its official departure in a few hours — that's for us here in the United States; Happy New 2021 to all y'all on the other side of the International Date Line — likely will be subdued. Thanks, no thanks, COVID-19. May you, too, be gone soon in the coming 12 months. But even if the ringing in the New Year will be in smaller, pandemic-precautioned pods, some adult beverages will be raised as the clock strikes midnight. And among those celebrating the most will be... Read more →
Some taxpayers awoke today to $600 (or more!) in their bank accounts. The money is the maximum per-person amount authorized by Congress and signed into law on Dec. 27 as part of the second COVID-19 economic relief measure. The Internal Revenue Service, which once again is in charge of distributing the economic impact payments (EIPs), says the electronic delivery will continue into next week. Some account holders may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of Jan. 4, 2021. Sorry, but you'll just have to wait for the... Read more →
Most of us are cheering the rapidly approaching end of tumultuous 2020. I definitely am right there with you with some pre-New Year's Eve joyfulness. But take a little time off from your anticipatory year-end celebrations to check out these tax moves. These final three tax tasks for the final three days of the year could pay off at filing time in 2021. 1. Know the value of donating items instead of cash. You have until Dec. 31 to donate to an IRS-qualified charity so you can claim the gift as a deduction on your 2020 tax return. If you... Read more →
My neighborhood optometrist is encouraging medical flexible spending account (FSA) owners to stop by and spend that money before the end of the year. (Photo by Kay Bell) You just discovered that you have money in your medical flexible spending account (FSA). For folks who don't have an FSA, this is a workplace benefit that allows you to put money into the account as an automatic withdrawal from your paychecks. In 2020, you could put up to $2,750 into your FSA. Since inflation has been low, that amount stays the same in 2021. You then use FSA funds to pay... Read more →
UPDATE, Dec. 29, 2020, 4:20 p.m. CST: Good news for those who saw their unemployment benefits lapse by the delayed signing of the second COVID relief bill. The Department of Labor say they will get the full 11 weeks of benefits, although most will have to wait a few weeks for state agencies to reprogram the package's provisions into their computers. To reflect this decision, the original headline "Millions out of luck and money as federal unemployment assistance ends" was changed. UPDATE, Dec. 27, 2020, 7:34 p.m. CST: The presidential COVID bill holdout is over. Donald J. Trump tonight signed... Read more →
Happy Day After Christmas, or as it's known in many parts of the world, Boxing Day. As a lover of cats, be they large (like these in an earlier Tumbling Taxes item), small or domesticated (as much as cats can be), I certainly understand the feline interpretation of Boxing Day. But I also appreciate the other ways, taxes included, to celebrate Boxing Day. Boxing Day's evolution: Boxing Day got its name in the 1800s when Queen Victoria was on the throne. Since then, it's been celebrated in Great Britain and many of its former colonies, notably Canada, Australia and New... Read more →